Deck 8: Marketing Strategies for New Market Entries

Question 1

Pioneers that are able to maintain their preeminent position well into the market's growth stage have supported their early entry with one or more marketing strategy elements.Identify the strategy that allows firms to expand their volumes quickly and achieve the benefits of experience-curve effects before major competitors can confront them.

A)broad product lines
B)heavy promotional expenditures
C)large entry scale
D)high product quality

Answer 1

C

Question 2

_____ is the simplest way to enter a foreign market because it involves the least commitment and risk.

A)Exporting
B)Countertrade
C)Franchising
D)Overseas direct investment

Answer 2

A

Question 3

Which of the following observations about pioneering firms is incorrect?

A)They are always the market-share leaders as the new product categories mature.
B)They must change and adapt their strategies as their products move through a life cycle.
C)Capitalising on early advantage,some of them earn substantial revenues and profits.
D)They can be overtaken by followers that offer better products,superior customer service or lower prices.

Answer 3

A

Question 4

Identify the firm characteristic of mass-market penetration for new product pioneers.

A)limited marketing skills and resources
B)a prospector with good capability for continued new product innovation
C)ability to shift from stimulation of primary demand to stimulation of selective demand
D)limited financial resources to commit to building capacity prior to demand growth

Question 5

The shake-out stage in a product life cycle is signalled by:

A)an expansion of the product line to attract new segments
B)limited purchase of the product due to lack of awareness
C)a drop in the overall growth rate and substantial price cuts
D)stability in terms of demand,technology and competition

Question 6

All of the following are true of firms adopting the niche penetration marketing strategy except:

A)It is appropriate when a number of different benefit segments are present in the new market.
B)It is attractive when only a few barriers to the entry of major competitors exist.
C)It is appropriate when the new market for the new product is more fragmented than expected.
D)It is appropriate when the product category is likely to experience positive network effects.

Question 7

Economists have noted how the value of a product or service can increase as more consumers adopt the product; in other words,as the network increases.This is referred to as:

A)economies of scale
B)economies of scope
C)positive network effect
D)increasing returns to scale

Question 8

What is true of the introductory stage in a product life cycle?

A)The product is easily available.
B)The net adoption rate holds steady.
C)Shakeout or competitive turbulence occurs at the end of this stage.
D)The length of the product line typically should be relatively short.

Question 9

Pioneering firms often have distribution advantages over follower firms because:

A)Distributors are wary of the high switching costs for end-consumers.
B)Distributors are often reluctant to take on second or third brands.
C)Distributors are can never enjoy the positive network effect.
D)Follower firms are typically stuck in the middle.

Question 10

These items may be moderately new to both the firm and the customers in its established product-markets.

A)repositionings
B)additions to existing product lines
C)new product lines
D)improvements in or revisions of existing products

Question 11

To establish a foothold in a future new market,or pre-empt a market segment,a firm must introduce:

A)new-to-the-world products; improvements or revisions to existing products
B)new-to-the-world products; additions to existing product line; repositionings
C)additions to or revisions of existing product line; repositionings; cost reductions
D)new-to-the-world products; new product line

Question 12

Which of the following marketing programs is used by the niche penetration strategy to increase the customers' ability to buy?

A)moving relatively quickly to expand offerings to appeal to multiple segments
B)offering free trial or extended warranty policies to reduce target customers' perceived risk
C)attempting to maintain margins at level consistent with value of product to early adopters
D)starting with high price but bringing out lower-priced versions in anticipation of competitive entries

Question 13

_____ is designed to obtain as much margin per unit as possible and also enables the company to recover its new product investments more quickly.

A)Penetration pricing
B)Odd-even pricing
C)Skimming
D)Prestige pricing

Question 14

Identify an advantage of follower strategies.

A)influencing consumer choice criteria and attitudes
B)making the best use of latest technology
C)possibility of positive network effects
D)ability to define the rules of the game

Question 15

The pioneer's brand can become the standard of reference customers use to evaluate other brands,making it more difficult for followers to convince existing customers that their new brands are superior to the older and more familiar pioneer.Which advantage of being a pioneer does this explain?

A)first choice of market segments and positions
B)economies of scale and experience
C)distribution advantages
D)high switching costs for early adopters

Question 16

New-to-the-world products can be defined as:

A)true innovations that are new to the firm and create an entirely new market
B)a product category that is new for the company introducing it,but not new to customers in the target market
C)existing products that are targeted at new applications and new market segments
D)items providing improved performance brought out to replace existing products

Question 17

Improving or revising existing products,additions to existing product lines and cost reductions aim at achieving which of the following objectives?

A)capitalising on distribution strengths
B)maintaining position as a product innovator
C)exploiting technology in a new way
D)defending a current market-share position

Question 18

Which of the following elements belongs to the successful late entrants' market strategy?

A)leapfrogging the pioneer with superior product technology
B)focusing on peripheral target markets or niches
C)larger entry scale than the pioneer
D)heavy promotional expenditures

Question 19

Through product enhancement,Compaq captured a substantial share of the commercial PC market by developing faster and more portable versions of IBM's original machine.This example illustrates Compaq's ability to take advantage of the pioneer's:

A)marketing mistakes
B)limited resources
C)positioning mistakes
D)product mistakes

Question 20

Which observation best describes new-to-the-world products?

A)They are new to the company but not to the market.
B)They are often not very innovative in design or operations.
C)They are aimed at new customer segments or repositionings of existing products.
D)They try to build primary demand by creating product awareness.

Question 21

The communications task is to move the potential customers through the four main stages of:

A)attention,interest,discovery,adoption
B)affiliation,interest,desire,affection
C)affection,attention,adoption,assurance
D)awareness,interest,desire,action

Question 22

The four components of the marketing mix-pricing,distribution (also known as place),promotion and product-are the key tactical components of a manager's strategic plan to develop a product's sustainable competitive advantage.

Question 23

Even though a pioneer marketing strategy has seven inherent competitive advantages regarding being the first to enter a new product market this does not always guarantee success.

Question 24

Introducing a product that is new to both the firm and target customers is known as open-sky innovation.

Question 25

Write a short note on the marketing program components for a skimming strategy.

Question 26

The product life cycle (PLC)concept's value lies in its ability to help management look at the six different phases of a product in the context of the current market in order to maintain a sustainable competitive advantage over competitor offerings.

Question 27

In the introductory stage of the PLC,penetration pricing aims to achieve quick market development,or to attract many customers at reasonable prices and create more market awareness and interest.

Question 28

Briefly explain licensing,franchising and joint ventures.

Question 29

Successful fast followers are more innovative and are thus able to leapfrog market pioneers and offer the market superior products.

Question 30

For industrial products,the time required to develop awareness of a product's uniqueness is often extensive.Therefore,firms selling industrial products usually engage in which of the following promotional activities?

A)personal selling
B)advertising on TV
C)public relations campaigns
D)product placement

Question 31

A firm's profits and survival relies solely on a strategy that cuts costs,sharpens its market focus and increases manufacturing efficiencies.

Question 32

All products,regardless of the strategic orientation of the firm,will go through each of the stages in the product life cycle.In this sense,the PLC is universally applicable.